I have the keyboard layout set to "Dvorak", but the simulator seems to assume "Qwerty" regardless. In the menus of "Hardware" > "Keyboard" I have checked off "Use the Same Keyboard Language as macOS" and "Connect Hardware Keyboard". Is there a hidden secret option to actually use the macOS keyboard layout or is this just broken? The wording seems to confound "language" with "layout".
I've seen a similar issue reported as a bug in iOS 8.2 simulator, but the simulator is reporting using iOS 11.2. I'm running Xcode 9.2 and Simulator 10.0 .
EDIT: I updated to the latest macOS (10.14.2) and latest Xcode (10.1) and the issue is still exactly the same. I type in the simulator "aoeu" and I get "asdf".
In order to get Dvorak on the "external" keyboard it has to be manually selected in the settings by going to Settings > General > Keyboard > Hardware Keyboard > "English (United States)" and then selecting "Dvorak". Of course, it just gets reset back to Qwerty after a reset.
Basically the "Use the Same Keyboard Language as macOS" is broken for Dvorak. It may be due to it not being a setting in the software keyboard.